First Republic: Short-Term Margin Compression Will Result in Long-Term Gains

First Republic Bank (NYSE: FRC) is likely to face pressure this year as the entire banking system struggles with deposit headwinds. The bank is not a huge benefactor from rising interest rates, to begin with, and its loan yields will not reprice high enough to offset the headwinds from rising deposit costs this year. First Republic is largely in the business of serving high-net-worth individuals in the coastal regions -- think San Francisco, Los Angeles, New York City, Boston, and other similar markets.